SKU is a code for a specific product of inventory used to identify it from lists, order forms, or invoices. A SKU is mainly associated with inventory management functions. If you’ve just ventured into a line of business requiring inventory, you might be wondering, “what does SKU stand for?” Well, it’s an abbreviation for Stock Keeping Unit, a term commonly used when managing stock items.
Tracking your inventory properly calls for a high level of accuracy, and that begins with getting it right from the SKU setup point for all your products. Again, successful inventory management heavily relies on a good SKU system.
Why is SKU Important?
- Stocktaking. Stocktaking should be a regular event (once a month is ideal) to ensure that your inventory records reflect what is actually held in your warehouse. When each unique item of stock has its own SKU, it becomes easier to organize stocktaking and pick out any discrepancies.
- Inventory tracking. Received inventory needs to be accurately recorded and tracked to monitor the sold and remaining stock. Also, product variations relating to colors and sizes can easily be tracked using an eCommerce platform with the SKU system for better inventory management.
- Identify potential stockouts. Stockouts result in delays in the delivery of products to your customers. They could also result in idle time by staff leading to wage wastages. However, using SKU, businesses can seamlessly monitor their inventory levels and reorder products as soon as the re-order point is reached. Turis is one such tool that helps you set re-order levels to ensure that stockouts are averted. Inventory thefts are also significantly reduced with proper stock tracking.
- Stock replenishment. Small business owners encounter challenges in maintaining systems of inventory manually. While B2B eCommerce platforms make it easier for store owners to manage stock, inventory replenishment requires a water-tight system backed with SKU. Backing up your inventory system with SKUs will mean that the quantity of on-hand items is easily known at all times. This also means that a re-order point can be set to ensure that stock is replenished in time. SKUs result in better tracking of inventory levels, making sure you only order when it’s necessary to limit holding excess inventory which could lead to dead stock.
- Profit identification. SKUs will not just help ID your items of inventory – they’ll go into specifics including color, type, material, or size. These variations can help you analyze which products are best sellers and profitable while taking note of the less favorite ones. Also, such reports give you a clear picture of your key profit streams as well as the basis for making vital business decisions.
Whether you’re a manufacturer, brand, wholesaler or retailer, SKUs are not one-size-fits-all; you’ll need a system that is tailored to your business specifications. To set your business up for success, consider identifying an inventory system that fits into your business model and not the other way round.
We developed Turis with one thing in mind – the same frustration you might be facing right now with managing inventory inefficiencies, problems finding the ideal eCommerce platform, and so on. Everything we came across online only seemed to be taking the “generalist” approach rather than focusing on specific pain points. So, if you’re looking beyond the obvious features in an online shop builder, welcome to Turis – the ultimate B2B eCommerce platform designed to give all companies, no matter how small or large, a true digital eCommerce experience.
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